Differences Between the June 2016 FOMC Statement and the June 2015 FOMC Statement

2016-06-16T07:24:00.000-07:00

Information received since the Federal Open Market Committee met in April ~~suggests~~indicates that the pace of improvement in the labor market has slowed while growth in economic activity ~~has been expanding moderately after having changed little during the first quarter. The pace of job gains~~ appears to have picked up ~~while~~. Although the unemployment rate ~~remained steady. On balance, a range of labor market indicators suggests that underutilization of labor resources~~ has declined, job gains have diminished ~~somewhat~~. Growth in household spending has ~~been moderate and the~~ strengthened. Since the beginning of the year, the housing sector has ~~shown some improvement; however,~~continued to improve and the drag from net exports appears to have lessened, but business fixed investment ~~and net exports stayed~~ has been soft. Inflation has continued to run below the Committee's 2 percent longer-run objective, partly reflecting earlier declines in energy prices and ~~decreasing~~in prices of non-energy imports~~; energy prices appear to have stabilized.~~. Market-based measures of inflation compensation ~~remain low;~~declined; most survey-based measures of longer-term inflation expectations ~~have remained stable~~are little changed, on balance, in recent months.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee currently expects that, with ~~appropriate~~gradual adjustments in the stance of monetary policy ~~accommodation~~, economic activity will expand at a moderate pace~~, with~~ and labor market indicators continuing to move toward levels the Committee judges consistent with its dual mandate. The Committee continues to see the risks to the outlook for economic activity and the labor market as nearly balanced.will strengthen. Inflation is ~~anticipated~~expected to remain ~~near its recent~~ low ~~level~~ in the near term, in part because of earlier declines in energy prices, but ~~the Committee expects inflation~~ to rise ~~gradually toward~~to 2 percent over the medium term as the ~~labor market improves further and the~~ transitory effects of ~~earlier~~past declines in energy and import prices dissipate. and the labor market strengthens further. The Committee continues to closely monitor inflation indicators and global economic and financial developments ~~closely~~.

~~To support continued progress toward maximum employment and price stability~~Against this backdrop, the Committee ~~today reaffirmed its view that the current 0 to 1/4 percent~~decided to maintain the target range for the federal funds rate at 1/4 to 1/2 percent. The stance of monetary policy remains ~~appropriate.~~ accommodative, thereby supporting further improvement in labor market conditions and a return to 2 percent inflation.

In determining ~~how long to maintain this~~ the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess ~~progress--both~~ realized and expected~~--toward~~ economic conditions relative to its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium termIn light of the current shortfall of inflation from 2 percent, the Committee will carefully monitor actual and expected progress toward its inflation goal. The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.

The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction., and it anticipates doing so until normalization of the level of the federal funds rate is well under way. This policy, by keeping the Committee's holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions.

When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent. The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run.

Voting for the FOMC monetary policy action were: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; ~~Charles L. Evans~~James Bullard; Stanley Fischer; ~~Jeffrey M. Lacker; Dennis P. Lockhart~~Esther L. George; Loretta J. Mester; Jerome H. Powell; Eric Rosengren; and Daniel K. Tarullo~~; and John C. Williams.~~

(TED Lecture) Teddy Cruz: The City of the Future

2014-06-13T01:00:00.000-07:00

(TED Lecture) Richard Wilkinson: How economic inequality harms societies

2014-06-06T01:00:00.000-07:00

(TED Lecture) Tim Jackson: An economic reality check

2014-05-30T01:00:00.000-07:00

Full Lecture: Milton Friedman: The Role of Government in a Free Society

2014-05-26T01:00:00.000-07:00

(TED Lecture) Yasheng Huang: Does democracy stifle economic growth?

2014-05-23T01:00:00.000-07:00

(Video) Milton Friedman: Why China Doesn't Have Political Freedom

2014-05-19T01:00:00.000-07:00

(TED Lecture) Amory Lovins: A 40-year plan for energy

2014-05-16T01:00:00.000-07:00

(Video) Milton Friedman: Should Good Samaritan Behavior Be Imposed by the State?

2014-05-12T01:00:00.000-07:00

(TED Lecture) James Howard Kunstler: The ghastly tragedy of the suburbs

2014-05-09T01:00:00.000-07:00

(Video) Milton Friedman vs Free Lunch Advocate

2014-05-05T01:00:00.000-07:00

(TED Lecture) Rob Hopkins: Transition to a world without oil

2014-05-02T01:00:00.000-07:00

(Video) Milton Friedman vs Poverty Advocate and Heckler

2014-04-28T01:00:00.000-07:00

(TED Lecture) Ian Goldin: Navigating our global future

2014-04-25T01:00:00.000-07:00

(Video) Milton Friedman: The Individual, Government, and the Free Market

2014-04-21T01:00:00.000-07:00

(TED Lecture) Bjorn Lomborg: Global priorities bigger than climate change

2014-04-18T01:00:00.000-07:00

(Video) Milton Friedman: The Slippery Slope of Regulations and Entitlements

2014-04-14T01:00:00.000-07:00

(TED Lectures) James B. Glattfelder: Who controls the world?

2014-04-11T01:00:00.000-07:00

(Video) Milton Friedman: Limits to Freedom

2014-04-07T01:00:00.000-07:00

(TED Lecture) Peter Eigen: How to expose the corrupt

2014-04-04T01:00:00.000-07:00

(Video) Milton Friedman: Two Types of Freedom

2014-03-31T01:00:00.000-07:00

(TED Lecture) Geoff Mulgan: Post-crash, investing in a better world

2014-03-28T01:00:00.000-07:00

(Documentary) Walter Williams: The State Against Blacks

2014-03-26T01:00:00.000-07:00

(Video) Milton Friedman on the Differences Between Economists

2014-03-24T01:00:00.000-07:00

(TED Lecture) Misha Glenny: How global crime networks work

2014-03-21T01:00:00.000-07:00

Common Sense Capitalism